Blinded by the light!

I went to get my eyes tested today and paid £25 for the test via the company account, apparently because I need eyes in my line of work as a Financial Adviser. The designer glasses were on offer at a whopping price for a bit of glass and metal and they wanted to charge me all sorts of extra for different types of lenses. As I only need them when my eyes get tired at the computer I didn't see the need for lenses that reflect the sun light or are smudge free and unbreakable by my imaginary children.

It could easily have cost me £250 for the name branded frames and £60 or so for each different lense add on. My point is not to do with the cost of the cheaper non branded frames or the lack of need for the add-ons but more to do with the time I spent with a professional.

Look at all that equipment it must have cost a fortune! Machines for checking your blurriness, your peripheral vision and to see if you have cancer of the eye! All that and the highly trained optician asking lots of probing questions about 'can you see these dots? or if it less blurry on side one or two? All that for £25?
would you get out of bed for an hours worth of your professional time, to pay the staff and cover the rent and rates of your store or even for one of the nice bits of equipment? Of course not.

My problem is that the lenses are made for little or nothing and the frames for less than that even, the fact that we are not paying the correct amount for the professional advice we are receiving and being charged instead for expensive bits of glass and plastic to cover the advice is my gripe. Is it our fault or did someone decide to start doing it and then everyone else followed?

I have no problem paying as I do for my dentist for a professionals opinion, the same as they should have no problem paying for mine. It would be nice to know who started this daft option of paying for the advice.

Is this your local second hand car dealer?

HM Revenue & Customs (HMRC) has won a legal battle against a £290 million tax avoidance scheme sold to 450 individuals, including former Radio One DJ Chris Moyles and fund managers.

The First Tier Tribunal found against the tax avoidance scheme which involved celebrities, fund managers and other high earners claiming that they were second-hand car dealers in their spare time.

The scheme allowed its members to say they incurred large fees working in the car trade, which could then be set against their tax bill.

Moyles (pictured) took to Twitter to admit he had been naïve in joining the scheme.

He wrote: ‘Upon advice, I signed up to a scheme which I was assured was legal. Despite this, my knowledge of the dealings of the scheme were naïve.

‘I'm not a tax expert and acted on advice I was given. This was a mistake and I accept the ruling without reservation.

This is HMRC's fourth consecutive win against the scheme’s promoters NT Advisors.

The tribunal said that a realistic view of the facts showed that the appellants’ aim was to make it appear that they had incurred vast fees in order to borrow modest amounts of money they did not need in order to invest it in a trade they had no desire to pursue.

The tribunal heard that Moyles had wanted to achieve £1 million in tax losses. which involved celebrities, fund managers and other high earners claiming that they were second-hand car dealers in their spare time.

I agree that Moyles is not a tax expert but what part of not actually being a car dealer made him suspect that he was lying and perhaps trying to dodge tax then?

This sort of thing brings financial advice in to disrepute and I would go as far to say that it's not financial advice at all but accountants playing at financial advice to the detriment of all of us and now also to their clients.

This is also part of trying to tax people half of their earnings because you're jealous of their success. For those who advocate such a level of taxation think for a moment how you would feel if half your hard work was stolen by the government and then wasted for all to see in the latest government computer system fiasco. People are happy to pay a fair tax but any person in their right mind would try to avoid paying excessive and punitive taxes and we should stop looking at successful people with green envious eyes and thinking of ways we can get back at them for having the audacity to work damn hard and become more successful than us; because lets be honest it's nothing more than envy and all the rubbish about spreading the load can be dealt with in a single sentence. If you think paying £5000 worth of tax is greater than a wealthy person paying £50,000 on the same level of tax then it's back to school for you sonny.

This just creates money for big accountancy firms who have no interest in society, if we could trust our elected representatives of all colours not to spend our hard earned money like it's going out of fashion then we wouldn't be so upset about having to pay tax in the first place.

Everyone should pay the same rate of tax but the level that you start to pay tax should be closer to £20,000. This would put a large number of the national accountancy firms out of business and bring in more money to the treasury as it would be pointless to keep your money offshore.

Networking hazards and the need for a tie

I managed to navigate all the steps leading to the 4N meeting at the Crowne Plaza in Leeds today except the last one! My new shoes on my big feet are more akin to clown feet and took me down at the last step. Coffee decided to hit my shirt and baked beans took out my tie, however with great skill I managed to keep the food on the plate although some still stuck to  me. I don't like being without a tie but it was that or a stain so I settled to try to look cool without my tie for a change. I don't know if I pulled it off.

Do you think that a Financial Adviser needs to wear a tie and suit or do you think that they can pull off a Tony Blair and just wear an open necked shirt?

I feel a bit naked without my tie or suit jacket but many professionals are starting to go down this route.

To Tie or not to Tie, that is the question.

Scotland given ‘historic' powers to issue bonds

The government has granted Scotland the power to issue its own bonds in what the chancellor has described to be a ‘historic move’.

The Treasury has said the Scottish will be permitted to issue up to £2.2 billion in debt to fund investments in various infrastructure projects.  

The idea was first mooted in an amendment to the Scotland Bill in June 2011 and today’s announcement - which is ahead of schedule - comes as the nation prepares for September’s referendum on independence.

However, the Treasury warned the cost of issuing Scottish bonds would be ‘significantly’ higher than the UK because of the higher ‘credit risk’ north of the border.  

Danny Alexander, chief secretary to the Treasury, said: ‘It will of course be up to the Scottish government to manage their borrowing, but this is complemented by the tax powers in the Scotland Act providing the Scottish government with an independent source of revenue to support borrowing costs.’

Chancellor George Osborne added: ‘[It is a] historic moment for Scotland, a country where the economy is growing with the government's long term economic plan. Being able to issue its own bonds gives Scotland new powers and new responsibility, within the security of the UK.

It has to be said if you want to be treated as a grown up country you need to manage and pay your own debts. This is why Scotland should have it's own currency and not rely on British taxpayers if things go wrong. Your either independent as a nation or you're not, you can't have your cake and eat it.

To Buy to Let or not

Those of us who have ventured in to the buy to let area of investing and have lived to tell the tale know what the risks are, however some still invest without understanding the downside. I have a friend who has 13 properties and I love listening to him tell me about the latest nightmare that one of them is giving him, my favourite was when a local hooker rented out one of his flats and stole all his fixtures and fittings.
I told a client recently that the level or risk is similar to investing directly in to the UK stock market and he thought I was a little bit mad! It's bricks and mortar for goodness sake he said. True, but let me explain some of the risks:

• Rental Void- you need to calculate on 10 months rental each year and not 12 months, this will help deal with vacant periods.
• Property Maintenance- New boiler, windows, roof, carpet, kitchen, lighting.... the list can be endless.
• Increased crime- criminals targeting the area will reduce the appeal of the property for rental and re-sale.
• Asylum centre or other project built nearby- This has happened to a friend of mine and he suffered a 25% fall in value nearly overnight on the capital and he's had to lower his rents.
• Purchase and Sale costs- stamp duty, legal fees, valuation, estate agents, all will reduce your return.
• Capital gains tax- not as easy to dodge as it was since the MPs expenses scandal.
• Income tax- If you're already a high rate taxpayer or greater then the income is added to your own income for tax purposes, this might push you in to higher rate tax if you're on the basic rate.
• Liquidity- During market downturns (they come after all booms if you're unsure) you may have to cut your losses if you want to sell, or worse it might not get any buyers at all and at the same time you could be paying for a mortgage without a tenant to help.

As you can see it's not without risk. I haven't mentioned the harassment factor with managing a property, or paying an estate agent to deal with everything.
The other alternative would be to invest the money and leave it with a professional to worry about. My friend with the 13 properties waited too long to sell during the boom and is now selling them one at a time. He's realised that he can get a good income from investing for his retirement without having to decorate any other room but his own for a change.